What is 'Tax Day'?
Today, 23 March 2021, we are expecting the Treasury to publish a host of consultation papers that may well propose long-term changes in UK tax policy.
Much of this is expected to be about the administration of our tax system but some, no doubt, will propose tax changes.
Nothing will happen overnight.
Parliament, tax professionals and others will be given time to scrutinise the consultation papers, and there may be another budget in the autumn with a view to possible changes from April 2022.
There has been much discussion already about reforming Capital Gains Tax (CGT) and Inheritance Tax (IHT) - also, it has already been hinted that tax paid by the self-employed should be aligned more closely with those who are employed.
As we approach the end of the tax year and prepare for the year ahead - make the most of current tax reliefs, exemptions and allowances available.
Check List - a handful of suggestions for you to think about:
- Transferring assets between spouses (or civil partners) without adverse tax implications to minimise your combined Income Tax liability.
- Making additional pension contributions or Gift Aid donations to charity to achieve tax relief of up to an effective rate of 60% if your income is likely to be in excess of £100,000.
- Claiming capital losses on assets or investments which are now worthless – can the loss be set against your income as opposed to carrying it forwards against future capital gains?
- Utilising your ISA allowances before the end of the tax year.
- Subscribing for Enterprise Investment Scheme shares which could reduce your Income Tax liability by 30% and enable a capital gain realised in the current, or an earlier, tax year to be deferred.
- Making use of the £3,000 IHT annual exemption and, after much consideration, arranging to gift excess income - completely free of IHT – to your loved ones on a regular basis.
Property investors will already know that, from April 2021, only 20% Income Tax relief will be given for loan interest payable out of their property income. Depending on the value of the loan, it may be possible to improve the net return if the ownership of your investment property can be altered in favour of a spouse who pays a lower amount of tax, without incurring a SDLT liability during the extended holiday period.
Call 01223 810 100 to speak to one of our tax advisers - our private client tax specialists will discuss how your family finances can be managed to maximise your income and ultimately, your family wealth.